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Scott has a new post on AI and money in politics. I'd like to take a step back and talk about how we got here.
In 2010, the Supreme Court ruled in Citizens United that there are essentially no constitutional limits on political spending and advertising. At the time, it was widely anticipated that this would turn American politics into the wild west of corruption, crony capitalism, and corporate propaganda. But in the years after the decision, the feared corporate catastrophe failed to materialize. Trump didn't win in 2016 because of corporate support. In the primary, he bragged that he was self-funding his campaign and so wasn't beholden to special interests. On the Democrat side, Bernie Sanders got a lot of milage out of constantly reminding people that he didn't have a SuperPac.
In 2019, Scott wrote the prophetic Too Much Dark Money in Almonds, in which he pointed out that wealthy actors are probably underspending on politics and then brainstormed ways to turn money into political influence. By 2022, we started to see serious attempts at using previously-unheard-of amounts of money to systematically affect the political process. Sam Bankman-Fried was too-clever-by-half donating money he didn't technically own, but Elon Musk's aquisition of Twitter ended wokeness overnight and likely won Trump the 2024 election. If Scott is to be believed, the cryptocurrency and AI industries are well on their way to fulfilling SBF's dream of rooting the state.
Why did it take 10+ years for this to happen? My hypothesis: cultural inertia (and shame).
Despite being purported as the main beneficiaries of Citizens United, big corporations weren't really trying to spend large sums of money on politics. Exxon Mobil didn't park an oil tanker full of cash in the Chesapeake waiting for the signal to shower Washington in oil money as part of their dastardly plan. That just wasn't how buisinesses operated. It took time to develop both a theoretical framework for how to turn an abritrarily large amount of money into political power (it's a lot more complicated than simply buying ads), and to develop a philosophical framework for why this isn't cartoonishly evil.
Related 2014 SSC: Does Class Warefare Have A Free-Rider Problem?. There Scott argues that there is a collective action problem among the rich fighting for their common interests, e.g. low taxes.
Even today, the money which influences politics is mostly spent by individual private individuals or by companies held privately. (With the META PAC being a notable exception).
Also, I think that while "we are spending a few hundred million dollars of company funds on Trump to get on his good side and get juicy US gov contracts" is probably a solid business decision (even if it is not what Adam Smith had in mind), spelling out how that is profitable at the stockholder's meeting is likely to get the CEO in legal trouble. So the straightforward buying of influence is more of a strategy among tech billionaires and middle eastern autocrats than for publicly traded companies.
You say that but I was surprised to see that the list of donors to Donald Trump's new east wing ballroom includes most major tech companies: Amazon, Apple, Google, HP, Meta (Facebook), Microsoft.
These are all publicly held companies, and companies that I'd pegged as in the Democrat camp. Apparently that doesn't stop them from throwing some money Trump's way to stay on his good side.
The CEO won't have to spell it out at the stockholders meeting, because stockholders already understand how bribing the government benefits the company, and making that policy explicit can only harm the company, so they're not going to demand an explanation from the CEO. Tacit approval is clearly the best policy here.
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